Retiring abroad might make sense from a financial standpoint. On paper when you move to a poorer country you’d expect your budget to grow tremendously. Everything is cheaper from rent to the cost of food. However, with a lower cost of living comes a host of other challenges.
In general, the less expensive the country, the poorer the country. And if a country has a low cost of living, but a relatively high standard of living, like say, Argentina, this is usually the result of a recent currency devaluation. Poor countries tend to have inadequate infrastructure, bad healthcare facilities, and volatile economies. You must take all these things into consideration before moving abroad, whether for your career or in retirement.
I think there are some general rules that need to be followed before you consider moving abroad. Don’t listen to those people who will tell you that moving abroad will make your life easier and will save you money. In many cases moving abroad actually will cost you more money. Why? Because exporting the lifestyle you are used to back home might be prohibitively expensive elsewhere. Goods you bought cheaply back home might be subject to tariffs that make them unaffordable to you. Healthcare you received for free in your home country now costs a few hundred dollars per month.
If you have the following issues in your life, think carefully before making the jump to another part of the world:
1. Your spouse/significant other is not keen on the idea. There is nothing worse than sharing a home with someone who would rather be elsewhere. If you are a couple, travel should be done together, rather than separately.
2. You have a loved one back home who is gravely ill. I know several expats who returned home, at least temporarily but often permanently, to care for a parent or close relative who was terminally ill. There is a great amount of guilt involved in being away from a family member who is ill. I would always recommend to someone to move back home to help that person.
3. You have a severe medical condition that requires regular treatment. Medical treatment varies widely from country to country. A drug you might take regularly is illegal elsewhere. When I lived in Dubai it was a common occurrence for expats to be arrested for carrying codeine into the country. The UAE is infamous for its draconian views on any drug that is even remotely addictive, including those whose primary purpose is medicinal. Traveling is exhausting, and only those in good health should consider it. That’s not to say someone with a disability can’t live overseas, it just means that the move will be a challenging one.
4. You have a criminal background or financial problems. Most countries will not accept you as an immigrant either for retirement or permanent residency purposes if you are found to have a criminal background and in many cases financial problems such as a bad credit history (particularly bankruptcies). We live in an era of restrictive immigration policies that are getting stricter in the face of economic turmoil. Only the best (or what the consulate thinks is the best) may apply to live elsewhere. Don’t view a criminal record as something to hide and don’t change your identity to avoid scrutiny. You will get found out.
5. You lack traveling experience. If you’ve never traveled abroad, jumping into retirement overseas is probably not a good idea. If you wish to retire abroad, check out your destination exhaustively before actually moving. If know the local language, the quirks of the local culture, and how to get around easily, then your move overseas will be a lot easier.
Retiring overseas can be the most rewarding choice you’ll ever make. But it must be a well thought out choice. While it can save you money, it can also lead to poor results if done improperly. Tomorrow, I’ll discuss one of the leading poor choices people who want to retire overseas make: Buying a property.